What income in kind is subject to personal income tax?
To begin with, let’s determine which payments are classified as natural income subject to personal income tax. For clarification, please refer to clause 2 of Art. 211 of the Tax Code of the Russian Federation, which states that income received by an individual in kind and subject to personal income tax includes:
- salary received from the employer in the form of goods, products, services;
- goods and services received by an individual from individuals or legal entities free of charge or subject to partial payment;
- goods and services (for example, food, training, recreation, etc.) received by an individual, but paid for by organizations or entrepreneurs.
At the same time, there is no need to withhold and pay personal income tax on the cost of goods and services that were issued to an individual for the performance of his labor duties (clause 3 of Article 217 of the Tax Code of the Russian Federation).
ConsultantPlus experts explained in detail how to reflect an employee’s income received in non-monetary form in 6-NDFL. To do everything correctly, get trial access to the system and go to the Ready solution. It's free.
Example
Amounts allocated by the employer for travel and accommodation of employees are considered to be payments in kind. Accordingly, they are considered the income of individual employees and are subject to personal income tax (letters from the Ministry of Finance dated September 15, 2014 No. 03-04-06/46030, dated September 15, 2014 No. 03-04-06/46035). But this rule does not apply to the employee’s travel and accommodation expenses incurred during his business trip: there is no need to collect personal income tax from them, since these expenses were incurred to fulfill the employee’s labor duties in relation to the employer.
We suggest that you familiarize yourself with the procedure for assessing personal income tax on travel expenses in a separate article “We pay personal income tax on travel expenses in 2022.”
Personal income tax is also not assessed on natural income that cannot be personified. For example, drinking water, snack food (cookies, candy, etc.) and other items and services intended for consumption by several employees and for which it is labor-intensive to track how much and which employee used them.
Situation
provides free meals to all its employees, regardless of their position and job responsibilities. Catering services are provided by a third party.
Question
Should free meals received by employees be subject to personal income tax?
Answer
Yes need. The food received by employees is their natural income, which must be subject to personal income tax (clause 2 of article 211 of the Tax Code of the Russian Federation). Moreover, when calculating the natural income of workers, it is necessary to take into account the amount of VAT presented (clause 1 of Article 211 of the Tax Code of the Russian Federation).
The personal income tax must be calculated on the date of receipt of primary documents confirming the amount of expenses for the provision of free food.
The amount of income received in the form of free meals for each employee is calculated based on his work schedule and the menu he chooses.
NOTE! If an employer must provide its employees with free food in accordance with the law, then in this case personal income tax on in-kind income received in the form of free food or food does not need to be withheld (clause 3 of Article 217 of the Tax Code of the Russian Federation).
Additional question
Is it necessary to withhold personal income tax from the cost of free food if it is organized on a buffet basis?
Answer
There are 2 possible answers here: yes and no.
On the one hand, the cost of free meals provided in the form of a buffet is almost impossible to distribute to each employee. This means that personal income tax is not withheld from income in the form of free meals.
But officials do not agree with this position. They believe that income in the form of free meals organized on a buffet basis should be subject to personal income tax. Moreover, the calculation of the received in-kind income must be made on the basis of a timesheet, cost of food and other documents (letters of the Ministry of Finance dated 05/17/2018 No. 03-04-06/33350, dated 04/18/2012 No. 03-04-06/6-117) . Fortunately, the majority of arbitration courts do not support this position, based on the fact that such a calculation is incorrect due to the lack of individualization (resolution of the Federal Antimonopoly Service of the Ural District dated August 20, 2009 No. F09-5950/09-S2, FAS Far Eastern District dated June 15, 2009 No. F03-2484/2009, Federal Antimonopoly Service of the North Caucasus District dated March 12, 2008 No. F08-478/08-265A).
On the other hand, there were situations when the court supported the tax authorities in assessing additional personal income tax on free meals in the form of a buffet, without taking into account the fact that the calculation of the timesheet and the cost of food does not make it possible to determine the exact amount of in-kind income received by each employee (resolution FAS Volga District dated June 22, 2009 in case No. A55-14976/2008).
Advice from experts nalog-nalog.ru
If there are significant monthly expenses for organizing free buffet meals for your employees, it is still better to ensure that they are individualized (for example, using special individual cards), so that in the future you can determine the amount of income received by each employee , and calculate the personal income tax amount based on it. Otherwise, the tax authorities will definitely file claims for non-payment of personal income tax and request all kinds of documents in order to independently determine the amount of in-kind income received in the form of free food.
If the costs of free food in the form of a buffet are insignificant or are of a one-time nature (for example, when holding banquets), then in this case you can safely not calculate the amount of income received by each employee in the form of free food, and, accordingly, not subject to personal income tax. .
To make it easier to determine whether income in kind issued to an individual by an organization or entrepreneur should be taxed, we suggest taking a two-question test presented in the diagram below.
For more information about income not subject to personal income tax, read our material “Income not subject to personal income tax.”
How to process salary payment?
To calculate wages, the accountant must use the T-51 or T-49 statement. To issue funds, he must draw up a separate statement.
It should be noted that the T-53 statement is not intended for calculating wages in non-monetary form. That is why it is impossible to use it for this type of payment.
To simplify the task, you should use the statement form that was developed for agricultural complexes No. 415-APK. First, it should be noted that in order to use it, this must be specified in the accounting policy of the organization (this is relevant if the company is engaged in other types of activities other than agricultural ones).
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Who should pay personal income tax on income in kind?
If income in kind was received from an individual who is not registered as an entrepreneur, then the individual who received such income must report personal income tax to the tax authority and make payments for it. This conclusion is based on the provisions of paragraph 1 of Art. 226 of the Tax Code of the Russian Federation, which states that individuals who are the source of income are not tax agents, which means they are not obliged to withhold and pay personal income tax on income received by other individuals.
For more information about who is recognized as a tax agent for personal income tax and what his responsibilities are, read the material “Tax agent for personal income tax: who is, responsibilities and BCC.”
If income in kind was issued to an individual by an organization or entrepreneur, then there are 2 possible scenarios:
- The organization or entrepreneur, in addition to income in kind, paid the individual income in cash. In this case, she must fulfill the duties of a tax agent, i.e. calculate personal income tax on income in kind, withhold it from income paid in cash (clause 4 of article 226 of the Tax Code of the Russian Federation), transfer the withheld tax to the budget and report to the tax authorities on the amounts of calculated, withheld and paid personal income tax.
NOTE! The amount of personal income tax withheld from the cash income of an individual to pay off personal income tax debt calculated from the natural income of the same individual should not be more than half of the individual’s income paid in cash (Clause 4, Article 226).
How to correctly calculate the amount of personal income tax? What reporting should I submit for this tax? When should I pay it to the tax authorities? You will find answers to these questions in our article “General procedure for calculating and paying personal income tax.”
- The income was paid only in kind, or, more precisely, after the payment of income in kind, payment of income in cash to an individual was not made until the end of the current year. In this situation, the obligation to pay personal income tax and submit a declaration with its calculation passes to the individual due to the fact that the organization (IP) is physically unable to withhold tax on natural income in cash equivalent.
But at the same time, the organization (IP) is obliged to inform the tax office and the taxpayer about the amount of calculated tax and the impossibility of withholding it. The message must be submitted in the form of form 2-NDFL with sign 2. The deadline for submitting this message is until March 1 of the year following the tax period in which the income in kind was issued (clause 5 of Article 226 of the Tax Code of the Russian Federation). In this case, the tax will be paid by the “physicist” himself, having received a corresponding notification from the tax authorities.
A third situation is also possible, when to pay the tax calculated on the natural income of an individual, there is not enough money withheld from the cash income of the same individual. We decided to give an explanation of how to proceed in this case in the form of an example presented below.
Condition
In March 2022, Sigma LLC presented S.P. Zaitsev with a laptop worth 35,000 rubles as a gift. That is, the employee received income in kind. The organization must collect and pay personal income tax from the income received. But not from the entire amount of income, but minus 4,000 rubles. (note: gifts worth up to 4,000 rubles are not subject to personal income tax, clause 28 of article 217 of the Tax Code of the Russian Federation). In addition to the gift, in March 2020, the employee received a salary in cash in the amount of 7,000 rubles, and then quit. Standard deductions are not provided to S.P. Zaitsev, who works part-time at Sigma LLC. The employee did not receive any more money until the end of the year.
Calculation
The amount of personal income tax that an employer must withhold from in-kind income received in the form of a laptop is 4,030 rubles: (35,000 – 4,000) × 13%.
The amount of personal income tax that the employer must withhold from cash income is 910 rubles: 7,000 × 13%.
The amount of cash income minus personal income tax on it was 6,090 rubles: 7,000 – 910.
In March, the employer withheld from the income of S.P. Zaitsev to pay personal income tax on income in kind (laptop) the amount of 3,045 rubles: 6,090 × 50%.
The balance of the personal income tax debt from the laptop as of the end of March was 985 rubles: 4,030 – 3,045.
At the end of the tax period (2020), the organization sent a message to the tax inspectorate and S.P. Zaitsev about the impossibility of withholding the amount of personal income tax from natural income in the amount of 985 rubles. Tax authorities should also be notified of this fact.
Find out how to inform the Federal Tax Service about the impossibility of withholding personal income tax from an employee’s income in ConsultantPlus. Get free demo access to K+ and go to the Ready Solution to find out all the details of this procedure.
How can an employee write a statement?
An employee can draw up an application, for example, for only one payment, or for a certain period of time: a quarter, a year. At the same time, the employee retains the right to early refusal to pay wages in this form if the period specified in the application exceeds 1 month.
The wording in the application may be as follows: “Based on Article 131 of the Labor Code of the Russian Federation and clause 4.1 of the collective agreement, I ask you to pay me 20% of the accrued wages for January 2022 in kind - goods of Continent LLC, namely, a microwave oven, the cost 5,500 rubles.”
If an employee pays alimony, then they must be withheld from this type of salary payments. The procedure for withholding alimony will be the same as for withholding from wages paid in cash (
Responsibility for failure to fulfill the duty of a tax agent
What happens if an organization or entrepreneur (in general terms, a tax agent) fails to fulfill its obligations to withhold and transfer personal income tax amounts to the budget from an individual’s in-kind income? In this case, during the next tax audit, the inspection inspectors will assess a fine in the amount of 20% of the amount of tax not withheld and not transferred to the budget (Article 123 of the Tax Code of the Russian Federation). Penalties will also be charged for violating the deadline for paying personal income tax.
Sending a message to the tax office about the impossibility of collecting tax on in-kind income issued to an individual will help you avoid this fine. But this method will help only under one condition: from the moment the income in kind was issued until the end of the current year, no income in cash was transferred to the individual.
The tax agent has the right to report the impossibility of collecting personal income tax on the natural income of an individual even if the due date has been missed (letter of the Federal Tax Service of Russia dated July 16, 2012 No. ED-4-3 / [ email protected] ).
For late submission of a message about the impossibility of withholding personal income tax, a tax agent may incur 2 penalties, the amount of which in most cases is much less than the fine for failure to remit tax:
- A fine of 200 rubles. for each document untimely submitted to the tax authority (clause 1 of Article 126 of the Tax Code of the Russian Federation).
- Penalties for violation of the deadline for payment of personal income tax. This period begins from the date of payment of tax by an individual established by Art. 228 of the Tax Code of the Russian Federation (July 15 of the year following the previous year). And it ends with the date of sending the message we are considering to the tax office (resolution of the Federal Antimonopoly Service of the West Siberian District dated December 30, 2013 in case No. A45-26891/2012).
Read about the new procedure for collecting fines from tax agents starting in 2019 here.
Article 129. Basic concepts and definitions
(as amended by Federal Law No. 90-FZ of June 30, 2006)
Wages (employee remuneration) - remuneration for labor depending on the qualifications of the employee, complexity, quantity, quality and conditions of the work performed, as well as compensation payments (additional payments and allowances compensatory nature, including for work in conditions deviating from normal, work in special climatic conditions and in territories exposed to radioactive contamination, and other compensation payments) and incentive payments (additional payments and incentive allowances, bonuses and other incentive payments) .
Part two became invalid on September 1, 2007. — Federal Law of April 20, 2007 N 54-FZ.
Tariff rate is a fixed amount of remuneration for an employee for performing a standard of work of a certain complexity (qualification) per unit of time, without taking into account compensation, incentives and social payments.
Salary (official salary) is a fixed amount of remuneration for an employee for the performance of labor (official) duties of a certain complexity for a calendar month, excluding compensation, incentives and social payments.
Basic salary (basic official salary), basic wage rate - minimum salary (official salary), wage rate of an employee of a state or municipal institution carrying out professional activities in the profession of a worker or position of an employee, included in the corresponding professional qualification group, excluding compensation, incentives and social payments.
Results
For personal income tax on income in kind issued by individuals who are not entrepreneurs, individuals who received this income must submit a declaration and make payments. If income in kind was issued by an organization or entrepreneur, then they must, as a tax agent, calculate personal income tax, withhold it from the individual’s income and transfer it to the budget only if, in addition to income in kind, the same individual was subsequently paid income in cash.
Otherwise, an individual who has received income in kind must independently calculate personal income tax and pay it to the budget, and the organization or entrepreneur must only send a message to the tax authority about the impossibility of withholding the required amount of personal income tax, so as not to subsequently be fined for failure to transfer tax to the budget.
You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.
Modern forms and types of remuneration
At the moment, there are two types of salaries that are issued to employees monthly:
- basic - it is accrued to employees for the period worked;
- additional - goes to the person’s account for the time that was not worked (this includes vacation pay and sick leave).
There are also two generally accepted forms of salary:
- time-based is a form of remuneration when funds are accrued to the employee for the time period worked;
- piecework - wages are paid for the quantity of products that were manufactured at the enterprise.
Payment amount
There is one important point that should always be taken into account. The enterprise has the right to pay only part of the salary in kind. The share should not be more than twenty percent of the total accrued amount.
There are often situations when an employee of an organization personally asks management to give him a large part of his salary in kind. He insists that it be more than twenty percent.
If such a situation arises, it is necessary to pre-register the sale of the property. In other words, according to the documents, everything should look as if the employee received the full amount of the salary, and then purchased property in the company where he works for cash.
If the payment amount exceeds the twenty percent limit, this can lead to problems. For example, the inspection authorities may ask why the employee received a share of the salary in kind that exceeds the established limit.
